Top Rated Tax Saving ELSS Funds in India in 2017

Shikhar Singh

16 Sep 2017

ELSS mutual funds are a very effective and efficient channel to save tax. Not only do these funds save you tax, they also let you invest while saving tax. In fact, some top mutual funds in India generate returns so good, many choose to remain invested in the same fund even after the 3 year lock-in period is over. Below are the top rated ELSS mutual funds on Groww.

Top 10 ELSS Mutual Funds in 2017:

Review

This fund has performed well in almost all cycles of markets ever since it was launched in 2007. Since inception, it has given a return of 15.32% which is an impressively good return considering this fund has seen the bad market conditions of 2008 and 2011.

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Rohit Singhania, the fund manager for this fund has invested in fundamentally strong companies and this shows in the fund’s performance. This fund is the highest rated ELSS mutual fund on Groww.

The majority of this fund’s investments are in the financial sector followed closely by the energy sector. 73.1% of this mutual fund’s assets are held in large-cap company stocks. Large-cap companies are seen to be more stable when compared to mid and small-cap companies.

Most of this fund’s investments are in the financial sector followed closely by the energy sector. 65.1% of this mutual fund’s assets are held in large-cap company stocks which makes this fund’s exposure to risk slightly greater than DSP BlackRock Tax Saver Fund. With an AUM of ₹684 Cr, this fund’s AUM is on the lower side leaving a good room for this fund to expand and grow before any worries of the AUM being too big start to show up.

Facts

Review

Reliance Tax Saver Fund started off as a mid-cap mutual fund but market conditions have made it a predominantly large-cap fund. Many times, mid-cap companies become large-cap companies too. It is a very flexible fund and has changed its portfolio from time to time ensuring good performance of the fund.

This fund has outperformed its category average and benchmark by a large margin consistently. This fund also benefits from a stable fund manager. Ashwani Kumar has been the fund manager of Reliance Tax Saver (ELSS) Fund since its inception in September 2005. Ashwani Kumar also manages some other popular mutual funds. Reliance Vision Fund and Reliance Top 200 Fund are some of such funds.

This fund is over 10 years old. Over that period, it has returned an astounding rate of return of 16.42%.

Though it holds a majority of its assets in the financial sector, its exposure to the financial sector is far lower than the others here. Only 22.5% of its assets are in the financial sector. The next biggest chunk held but this mutual fund is in the industrial manufacturing sector (16.1%) and in the automobile sector (15.6%).

Facts

Review

Launched in March 1996, this fund is over two decades old. And being that old, it has a mind-boggling annualized return of 25.80% since launch. Aditya Birla Sun Life Tax Relief 96 routinely and consistently outperforms the benchmark. Needless to say, this fund is a 5 star rated fund on Groww.

It has an incredibly diverse portfolio. This is shown very well by the percentage it has invested in the ‘others’ category. While like nearly all mutual funds on this list, it too has a majority of its funds in the financial sector, its exposure to the same is much lower than the others at 20.2%. Nearly similar amounts are invested in the automobile sector (18.7%) and the consumer goods sector (17.1%). Other sectors this fund is invested in are the cement and cement products industry, fertilizer and pesticides sector, industrial manufacturing, and a few others.

Aditya Birla Sun Life Tax Relief 96 has had no change of fund manager since 2006. Ajay Gard has been holding the chair since 2006 and has done a splendid job. This fund has performed poorly in bear years like 2008 and 2011. However, it has also countered those low with very good performance in bull years. Ajay Garg has a stellar reputation and manages a total of 8 mutual funds. Some of those include Aditya Birla Sun Life MNC Fund, Aditya Birla Sun Life Tax Plan, and Aditya Birla Sun Life Savings Fund.

Facts

Review

This is yet another tax saving ELSS mutual fund but the Aditya Birla Sun Life AMC. Soon after launching the very popular Aditya Birla Sun Life Tax Relief 96 mutual fund, this AMC launched Aditya Birla Tax Relief Plan in 1999.

Since inception, this mutual fund has managed to give a very impressive return of 20.72% along with displaying a very consistent performance.

Between this fund and its older sibling, there is a key difference – exposure to the mid-cap companies. While Aditya Birla Sun Life Tax Relief 96 has a majority of its money invested in large-cap companies, Aditya Birla Sun Life Tax Relief has only 43.90% invested in large-cap companies. A very bold 53.70% of its assets are invested in mid-cap companies.

Facts

Review

This fund is very similar to the previous fund (Aditya Birla Sun Life Tax Relief 96) in that both these funds were launched in 1996. Not just that, they’re also similar in having had no fund manager changes since 2006. Even the returns in since this fund’s launch is 26.97% which is in the same region as that given by Aditya Birla Sun Life Tax Relief 96.

HDFC Taxsaver is essentially a large-cap mutual fund. 74.7% of this fund’s assets are invested in large-cap companies. It also has a relatively low expense ratio at 2.17%. It has a healthy AUM of ₹6,691.

Vinay R. Kulkarni has been managing this fund since 2006 and has done an exemplary job of steering this fund through good and bad times. He manages a very high 10 mutual fund. Some mutual funds he manages are HDFC Equity Savings Fund and HDFC Core & Satellite Fund.

Facts

Review

HDFC Long Term Advantage Fund has a much lower risk when compared to the benchmark. At the same time, this fund has fared much above the benchmark in terms of returns. Also, this fund has performed better than most ELSS mutual funds in the last 3 and 5 years with the exception of only one.

HDFC Long Term Advantage Fund focuses mostly on large-cap funds as is evident from its 65% asset allocation in large-cap companies. Besides the financial sector like every other mutual fund here, this fund has invested nearly similar percentages of assets in the industrial manufacturing sector (16.1%), the automobile sector (16.2%) and the energy sector (13.2%).

Facts

Review

IDFC Tax Advantage (ELSS) Fund can boast of having beaten the benchmark every single year since inception leaving apart the very first year. The fund even managed to stay on the right side of the benchmark in the turbulent year of 2011.

IDFC Tax Advantage (ELSS) Fund uses its deep understanding of growth potential in small and medium-sized companies to identify potential. The fund has a higher investment in mid and small-cap companies. Nearly half of its allocation is in the large-cap companies group while the other half is in mid-cap companies group (36.2%) and small-cap companies (10%).

Again, like the others, the financial sector is where its highest allocation of funds is: 27.2%. That is followed by an allocation of 17.2% in the consumer goods sector. Though not very often. IDFC Tax Advantage (ELSS) Funds often take debt and cash calls depending on the market conditions.

This fund is managed by Daylynn Gerard Paul Pinto. He has been managing this mutual fund since October 2016. He also manages another mutual fund – IDFC Sterling Equity.

Facts

Review

The returns of this fund over the past 5 years have been good. In the last one year, it gave a return of 20.72%. Over the last three years, that number stood at 14.87% and over the last five-year period, 18.28%.

This fund is quite old having been launched way back in 1999. It must be noted here that this fund does not support Systematic Investment Plans (SIP) as a mode to invest. Investors can invest only using the lump sum mode. If you want to invest in this mutual fund but the lack of an SIP option is limiting you, you should first ask yourself if SIP is the right way to invest given your conditions. To find out which is better for you, read this article.

This mutual fund has 9.2% of its assets allocated in the financial services sector. Consumer goods occupy the second place with an allocation of 10.50%. Industrial manufacturing sector (9.20%), automobile sector (9.20%), cement and cement products sector (8.1%), and energy sector (8.00%) are some other noteworthy sectors this mutual fund has invested in. This mutual fund is a 4 star rated fund on Groww. The ‘open-ended’ in the name of this mutual fund refers to the open-ended nature of this mutual fund.

The ‘open-ended’ in the name of this mutual fund refers to the open-ended nature of this mutual fund. Since this is an ELSS mutual fund, there still is a 3 year lock-in period however you can add to this fund any time you wish to. Do not get mislead by this name. Every other mutual fund on this list is open-ended as well.

Facts

Review

Since its launch in 2006, this mutual fund has performed well, providing investors with a return of 15.60% over the period. The returns in the last 5 years have been decent at 19.34%. In the last 3 years, the performance dipped to 15.58% but then in the last one year, the performance surged up to 26.44%.

It’s exposure to mid-cap companies is good. It has nearly equal assets in large cap stocks as mid and small cap company shares combined. 54.3% asset is in the large-cap companies while 42.7% and 3.10% assets are in mid-cap and small-cap respectively.

This mutual fund’s portfolio is incredibly diversified. Besides the ubiquitous financial sector with 27.60% allocation, 13.6% in consumer goods sector, 13.1% in the construction sector are other noteworthy investment sectors for this fund. However, besides these, L&T Tax Advantage Fund has 25.7% assets allocated in ‘others’ – which means various companies belonging to many sectors. This proves just how diverse this fund’s investments really are.

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